Sunday, December 17, 2006

Process Improvement to incease operating efficiency

I am very big fan of improvement in business and process improvement as part of aligning IT strategy with business strategy. It is very important of any company of any size to make sure that it inspects its IT that drives its buinesses. The loop holes in its processes to develop and implement application can be the huge cost for business and would lead to take operating cost of business out of whack.
Many time profit marign gets reduced due to high operating cost since it IT process are not that effecient.
Process improvement and automation is the key and should be repeatively reviewed and brought to a standard based on the requirement of the IT group and customizing it to the needs.
It finally needs to be backed by the IT heads and promoted by them for implementation of it and adhering to it.

Mapping and Improving the Processes in Your Organization
(Also known as Rummler-Brache Diagrams)


When thinking about your organization, have you ever said to yourself that the right hand doesn't know what the left hand is doing? Chances are you have: Despite all the efforts people have made to streamline business operations and flatten organization structures, there are still a great many activities that involve more than one department or team.
Whether you organize your department or teams by function (marketing, accounts, operations), by purpose (for example, corporate customer management) or by any other means, the fact is that a department or team needs to work with other departments or teams.

This means connections, communications and hand-offs between departments and teams. And these create the risk of processing gaps, inefficiencies and duplications, which can contribute to reduced performance or higher costs.

Even well designed processes and interactions are at risk of inefficiency creeping in: It's a fact of human nature; and so, it's something that needs to be managed. By having a formal method for identifying and integrating processes between departments and teams, you can ensure the connections, communications and hand-offs are well-designed and well managed. One such approach uses Swim Lane Diagrams, also known as Rummler-Brache Diagrams.

Process diagrams, in general, are a great tool to help spot processing gaps and inefficiencies. The added advantage of the Swim Lane Diagram approach is that it focuses on the high risk interconnections between departments and teams, and helps you spot more clearly issues and risks associated with these.

Creating and Using Swim Lane Diagrams

The first step to spotting inefficiencies and making improvements is to break down your organization's processes into manageable pieces. If you tried to look at everything at once and in detail, you'd be overwhelmed. So before you get started, it's important to clarify what you are trying to accomplish with Swim Lane Diagrams, and so determine the right areas of focus and level of detail.

If you are trying to find strategic inefficiencies, then analyzing every process in detail is unnecessary and cumbersome. Here you might assign each main functional area to a swim lane and look at the interchanges in and between them. This would help you spot disconnects between functional areas of the business.

If you were trying to diagnose inefficiencies in your hiring and recruitment process then you would look at specific roles, departments and perhaps some key individuals and assign these to the swim lanes.
For a comprehensive approach, you may start by analyzing the processes and organization using high level Swim Lane Diagrams. Then, once you have spotted areas you need to focus on, you can drill down there using more detail diagrams.

1. Determine What You Aim to Accomplish:

  • What business process do you want to analyze?
  • Is it operational, strategic, functional, etc.?
  • What organization units are involved and what level of detail do you want to analyze these to spot inefficiencies?

2. Clarify the Processes You are Focusing On:

A process is defined for this purpose as a series of tasks that have a specific end result, such as hiring a staff member, producing a product, acquiring a new customer.
  • For each process you are analyzing, what is the end result?

3. Identify all Participants in the Processes You are Analyzing:

These include all the organization units participating in the processes, and anyone who provides inputs or receives outputs from it. Depending on the level of detail you have chosen, these may be by departments, teams or individual people; or even a computer system that performs certain parts of the process.
  • Which organization units participate?
  • Where do the inputs to the process come from?
  • Who receives the output of the process?

4. Create the Diagram:

List the participants in the far left column of the diagram.
Assign each of these participants to a horizontal band (swim lane). It is helpful to assign the swim lanes in sequence, with the first column assigned to the participant who provides the first input. (For customer facing processes, this is often the customer.)

5. List the Step or Activities Required at Each Stage of the Process:

  • Follow through the process sequentially.
  • Remember you are mapping how the process is currently being done – not how you think it should be done.
  • The key to creating a useful diagram is to keep it as simple as possible. Try not to include too many loop backs (unless you are focusing on exceptions) – and keep the process mapping moving forward.

6. Analyze the Diagram for Potential Areas of Improvement:

  • Are there any gaps or steps missing?
  • Is there duplication?
  • Are there overlaps, where several people or teams perform the same task or activity?
  • Are there activities that add no value?
Once you 've identified potential areas for improvement, the next step is to decide how to address the issues and make changes. Swim Lane Diagrams can also be used at this stage to map out the proposed process changes. As with any proposed changes in the organization, the pros and cons need to be analyzed, and any change that follow must be carefully planned.
For example, if you are considering removing duplicate processes, you must first look at whether there is a legitimate need and also what would be the impact of removing the duplication: A duplicate process may exist "legitimately" to provide, for example, proper financial or safety controls. (Techniques like Brainstorming and Impact Analysis can help you think through the consequences of a change.)

Key Points

Swim Lane Diagrams are useful tool for identifying sources of inefficiency within, and between, processes and organization units. By using structured pictures to show how processes achieve their aims, you can see at a glance who is responsible for what, and whether there are potential areas for improvement in the process.